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Rent rises to moderate by year end as affordability bites - Zoopla

The surge in rents will subside and the market will normalise before the end of the year.

That’s the prediction from Zoopla in its latest market snapshot.

It says rental growth is currently being driven by high rental demand and limited supply, trends that are more pronounced in city centres. 


But the surge of post-pandemic pent-up demand will normalise through summer and autumn, says the portal, while at the same time, stretched affordability will also start to put a limit on further rental growth although this may not apply at a similar level across the market. 

While renters with more disposable income can adjust their property choices in order to limit their rental payments, those at the more economic end of the market have less choice to do this, and are most impacted by rent rises. 

However, the portal observers that the lack of supply is a wider structural issue in the Private Rented Sector as buy to let landlords are not investing at the same pace as they were before tax changes which have been introduced since 2016. This will put a floor under rental growth. 

Even so, in a market which has registered double-digit annual rental growth, landlords in local markets will find increased sensitivity to pricing among renters. 

Zoopla says its data shows that, on average, tenants are staying put in their current properties for longer, which may be partly due to not wanting to move into a new rental property where a larger rent increase will be applied. 

There is a question around rising interest rates and whether renters will feel the impact of rising mortgage rates for landlords. Most landlords will have fixed-rate mortgage deals, so this will not be happening across the whole market at once, but in these market conditions, local demand will determine whether landlords can pass on this increased cost, especially as living costs are rising. 

“We expect rents to continue to rise this year, but at a more modest pace, with UK rental growth excluding London at 4.5 per cent by the end of the year, which is in line with independent forecasts for earnings growth for 2022. We forecast London rental growth to be running at around 3.5 per cent by the end of the year” the portal concludes. 

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    If rents are unaffordable that must = a big rise in the homeless

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    If the EPC thing is confirmed then watch the landlords selling spiral up. That will blow this prediction out of the water

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    Sorry Zoopla, you are wrong.
    1. You’ve not factored in the affect of scrapping S21 evictions (which will lead to more landlords selling up)
    2. The EPC crisis will lead to a significant reduction in available properties at the bottom half of the market.
    3. The increase of cash grabbing licensing schemes from councils and in turn increased demands on landlords to adhere to the whims of councils in terms of mandatory improvements.

    These three factors will drive a significant amount of landlords to exit the market. The demand vs supply ratio will only get worse as far as renters are concerned. I see nothing on the horizon to reverse this trend, unless the government start doing some hefty u-turns, but the politicians are more interested in appeasing left wing activists than actually improving things.

  • David Saunders

    Doc Johnson, Shelter, Generation rent etc and Marty McGove seem hell bent on taking us all " Back To The Future" where private rentals are as rare as rocking horse droppings, rents are sky high and homeless figures are even higher but no doubt Doc will have a plan to avoid the flack when the government goes over the cliff come election day whilst singing " Keep the red flag flying here"


    Times change, baby boomers, of which I'm one, worked to get on the housing ladder, fast forward and we have the '' entitled generation'' where it is their human right to be on the housing ladder, sad isn't it but these '' entitled'' will die in poverty , not my problem I'll be 6 foot under by then.

  • David Saunders

    But us baby boomers are the lucky ones Andrew and the harder we worked the luckier we became so the government now believe it's pay back time and we either sell up and pay CGT or accept the way forward with sitting tenants which I tried in the 1970s and rent controls etc.


    Yes David and you make your own luck in life

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    Andrew, the way Its going now you have some chance of get six foot under, who’s going to dig the hole more likely we’ll be in an urn, so many doing it now., cheaper option. I don’t like that system really gone in a flash like you never existed, so better create merry hell while we are here.


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